Elon Musk's Twitter made a mistake on tax documents for laid off workers. Now they may miss the tax filing deadline.
- Former Twitter workers were told this week that they likely received incorrect tax information.
- The error likely won't be rectified until after the IRS tax-filing deadline on April 18.
Twitter provided incorrect tax documentation to many former employees who were laid off or resigned after Elon Musk, Twitter's current CEO, took over. The company told them that the issue likely won't be corrected until after the IRS deadline to file taxes has passed.
Dozens of employees learned that they may have received W-2 forms that incorrectly reported any income they may have received from the sale of company stock in October, according to an email sent Monday, seen by Insider and signed by Twitter's "US Payroll team." The payouts from such sales were "not recorded" on the W-2 forms sent out, according to the email and several people who received it.
Musk took over Twitter in late October and made it a private company. As part of his $44 billion deal to buy Twitter, all holders of company stock — including employees who received part of their compensation in the form of shares — were effectively forced to sell at $54.20 per share.
To rectify the mistake on the W-2s, Twitter will send a W-2 C form, used to make corrections to W-2s. The timeframe for affected former employees receiving the corrections is 30 days. However, the IRS deadline to file taxes is April 18, so many former employees now must file an extension. Others have already filed their returns and are concerned they will be hit in the future with the consequence of filing an incorrect return.
Twitter's email to employees did not include any advice on how to file their taxes, seek an extension, or amend taxes that may have been filed already.
One laid off worker joked that Musk's Twitter "is really the gift that keeps on giving." Another says the late timing "feels like willful negligence" because the company had five months to realize this mistake and inform those affected.
Twitter did not comment. Emails to the company's press address are now being dealt with via an automated response that includes only the smiling poop emoji.
This is the second time this year that Twitter had issues with W-2s. In February, workers in 38 states, including New York, were told their tax documents had the wrong employer tax IDs and would need to be corrected or resent, several impacted workers told Insider.
Issues with tax filings must be fixed fairly quickly. The IRS requires employers to fix any mistakes in their W-2 forms as soon as possible.
Employees who have yet to file their taxes can seek an extension so that they can get the correct filing from their employer, but they'll still need to pay their taxes by the April 18 deadline set by the IRS, said Lisa Reilly Payton, an estate planning and tax lawyer at Frazer, Ryan, Goldberg & Arnold LLP.
Employees can use existing pay documents to make their best estimate of the taxes they believe are due and pay that by the deadline, and those who have already filed their taxes should amend their tax return when they receive the correct W-2, Payton said.
"Failure to report all your income, no matter the dollar amount, to the IRS, is a serious issue," Payton said.
Shortly after Musk took over the company at the end of October, Twitter's payroll department and most of its finance teams left the company, as Insider reported at the time.
Hundreds of former Twitter workers are part of a mass arbitration effort, essentially suing Musk for his handling of layoffs and forced resignations. The workers also say that Musk refused to pay them the severance and benefits they were set to receive. The legal actions are ongoing.
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